zdl_cryptofandomcom-20200214-history
DYdX
Basics * dYdX "enables open, efficient and secure financial products on cryptoassets". * Open trading platform for crypto assets * Works on the application layer. Focus is on use cases. * Live (1-3-2019) on Ethereum Mainnet * Launched the ETH-USDC market through 0x How Decentralized is it? * ConsenSys Codefi released (9-2019) a scoring website for DeFi projects. As of 2-11-2019 it has also analysed dYdX: "dYdX also provides a code audit report but has not performed formal verification. In the financial risk domain dYdX has maintained high liquidity and a moderate to high collateral index score." * Was classified Degree 4 DeFi ''on the HackerNoon rankings of 25-4-2019. "These DeFi products are non-custodial, have permissionless margin calls, permissionless provision of margin call liquidity, and decentralized price feeds, but centrally determine interest rates and centrally control platform developments and updates."'' * A BIG side note, is that the blog was written by Kyle J Kistner who is Chief Vision Officer at bZx. He gave his own project the highest ranking. What a surprise. * From the comprehensive blog post: "Custody: dYdX smart contracts are non-custodial from the point of loan origination. Initiating Margin Calls: Margin calls can be initiated by anyone. There is a 5% discount on liquidated collateral to incentivize margin callers. Margin calls are permissionless. Margin Call Liquidity: Anyone can provide margin call liquidity, making this feature decentralized. Price Feeds: dYdX uses the MakerDAO price feed for ETH and DAI, but also uses the Uniswap and ETH2DAI price feed to bound the update price to mitigate attacks on the feed. The MakerDAO price feed is semi-centralized, but is also not controlled by dYdX. For this reason we believe the dYdX price feed should be considered decentralized, but not as decentralized as using Kyber. It should be noted that the centralization of the dYdX approach increases the cost of an attack on the price feed. Interest Rates: dYdX sets the interest rate model parameters, giving them central control over the interest rates. Development: The dYdX smart contracts are centrally developed and closed source. The team reports that the contracts will be verified on Etherscan shortly." Liquidations in 1-2020 * From DeFi Weekly (17-1-2020): "During the drop to $120/ETH dYdX saw their total assets locked up drop from $30m all the way down to $15m! Why? Basically the volume of people trying to liquidate was so high that dYdX's front-end servers collapsed under the pressure. As a result many traders got liquidated and lost a lot of confidence in the platform. They're slowly making their way back up but it really shows how an incident like this can cause irreparable harm to a product/protocol's reputation when it comes to reliability. When we think about making software, reliability isn't a big as a focus compared to more traditional industries like medicine/automobiles etc due to the ease of making changes. However, I think the mindset of ensuring reliability in all cases is hard to enforce in the land of money enabled software as it takes a different mindset when designing your architecture (not just for smart contracts but the entire stack). The team's more than capable of fixing this but it should serve as a good reminder to any DeFi team that the reliability of your front-end is just as important as the reliability of your contracts, especially if the number of 3rd party interfaces for your protocol is limited. Furthermore, if liquidity is a moat to defend, a large loss of it can really impact both sides of the money market's equation." Team, investors, partnerships, etc. * Zhuoxun Yin; Head of Strategy and Operations * raised $10M Series A led by a16z crypto and Polychain Capital. "And continued support from Abstract Ventures, Kindred Ventures, 1confirmation, Elad Gil and Fred Ehrsam. We also welcome new investors: Craft Ventures, Bain Capital Ventures, Naval Ravikant, Kevin Hartz, Dragonfly Capital and VY Capital." * Has attended the program of Startup Studio * Member of the DeFi Network * Part of the WBTC community (still as of 8-2019)Category:Companies/Organisations